Bangladesh stops asking US for GSP trade facilities

Bangladesh has been asking for the resumption of GSP privilege in the US market since losing it in 2013 but there is apparently a change of heart as it did not raise the issue in the third round of TICFA meeting.

Senior Correspondentbdnews24.com
Published : 17 May 2017, 03:47 PM
Updated : 17 May 2017, 05:43 PM

“It has not been discussed,” Commerce Secretary Shubhashish Bose, who led the Bangladesh side, said on being asked at a briefing after the meeting on Wednesday in Dhaka.

He did not explain why they did not discuss the issue, but said they have asked for the duty- and quota-free market access for Bangladeshi products as per the WTO rules for LDCs.

The Trade and Investment Cooperation Forum Agreement or TICFA was signed in November 2013 with the aim to establish an annual forum to identify and remove barriers to increasing bilateral trade and investment.

The Obama administration suspended the GSP privilege, citing factory safety and workers rights concerns, before the agreement was reached.

There had been a perception that Bangladesh will get back the GSP privilege and the duty-free market access in the US market through discussions under the TICFA.

But there has been no headway in those issues so far. Even the commerce secretary indicated that Bangladesh’s exports to the US have also declined in recent months.

So, what is the relevance of TICFA today?

bdnews24.com posed this question before US Ambassador Marcia Bernicat who was also present at the briefing.

“You are missing the point of TICFA, if you think it is only for producing specific results,” she said.

Trade relations between the countries are “extremely complex”, she said, adding that it goes well beyond the readymade garments which are the “most successful” products of Bangladesh and the US still remained the single largest market.

She said the Doha round which is being referred for duty-free market access has never been concluded. So the duty-free access was “never fully decided”.

So far the US has offered the access to two “multi-country” trade agreements – one is to the poorest region Sub-Saharan Africa and the other to the Caribbean.

It is up to the US congress, Ambassador Bernicat said, to decide whether Bangladesh will get the privilege in future.

According to her, the fall of the dollar affects the entire retail sector. “We are not buying as much of anything at this moment,” so the exports of all countries to the US market have declined.

“But it was the second smallest drop for Bangladesh,” she said.

A senior official at the foreign ministry told bdnews24.com after the briefing that it was a “strategic decision” not to press for GSP anymore.

“We have been asking for GSP for long. But it seems we’ll never get it back. So we have decided to stop asking for this.

“The GSP privilege was not significant as we did not use to get that for our main exports. So now we are asking for duty-free market access, which is what the US extends to some African LDCs,” the official said.

Wednesday’s TICFA meeting in Dhaka was the first brainstorming under the agreement after the Trump administration assumed office in Washington.

Assistant US Trade Representative for South and Central Asian Affairs Mark Linscott led the 15-strong American team.

Foreign Secretary Md Shahidul Haque said they asked the US side about the trade policy of the new administration.

“They informed us that US will not depart from the free market economy.”

He said the hosts presented a future economic perspective of Bangladesh.

“We told them Bangladesh is also a land of opportunity. You have to look at it from that angle,” he said.

Apart from market access, issues related to ease of doing business, intellectual property rights, government procurement policy and labour issues have been discussed, among others, in the daylong meeting at the state guest house Padma.

Later, the US embassy in a statement said both governments pledged their commitment to deepen engagements and increase their trade and economic ties.

The United States particularly noted its interest in addressing specific market access barriers to trade and concerns on overall labour reform.

It expressed its hope for the speedy resolution of pending cases stemming from the labour unrest in Ashulia last year. 

Bangladesh and the United States had $6.8 billion two-way goods trade during 2016.